This equity participation plan template has 25 pages and is a MS Word file type listed under our legal agreements documents.
Sample of our equity participation plan template:
EQUITY PARTICIPATION PLAN This Equity Participation Plan is adopted by the Board of Directors of [NAME OF COMPANY], and is effective on [DATE], ESTABLISHMENT, PURPOSE AND DURATION Effective Date and Purpose. The Company hereby establishes this Equity Participation Plan (the "Plan"). The Plan is intended to attract and retain exceptionally qualified employees, consultants and directors upon whom, in large measure, the sustained progress, growth and profitability of the Company depend. By encouraging employees, consultants and directors of the Company and its Subsidiaries to acquire a proprietary interest in the Company's growth and performance, the Company intends to motivate employees, consultants and directors to achieve long-term Company goals and to more closely align such Persons' interests with those of the Company's other stockholders. The Plan was approved by the Board on [EFFECTIVE DATE], the "Effective Date"), subject to approval by the Company's stockholders. Duration of the Plan. The Plan shall commence on the Effective Date and shall remain in effect, subject to the right of the Board of Directors of the Company to amend or terminate the Plan at any time pursuant to Section 15 hereof, until the earlier to occur of (a) the date all Shares subject to the Plan shall have been purchased or acquired and the Restrictions on all Restricted Stock granted under the Plan shall have lapsed, according to the Plan's provisions, or (b) ten (10) years from the Effective Date of the Plan. The termination of the Plan shall not adversely affect any Awards outstanding on the date of such termination. DEFINITIONS As used in the Plan, in addition to terms elsewhere defined in the Plan, the following terms shall have the meanings set forth below: "Annual Incentive Award" means a performance bonus determined under Section 12. "Award" means any Option (including Non-Qualified Stock Options and Incentive Stock Options), Stock Appreciation Right, Restricted Stock, Share, Restricted Stock Unit, Deferred Stock, Performance Unit, Substitute Award, Dividend Equivalent or Annual Incentive Award. "Award Agreement" means any written agreement, contract, or other instrument or document evidencing any Award granted hereunder between the Company and the Grantee. "Beneficiary" means the Person designated to receive Plan benefits, if any, following the Grantee's death, in accordance with Section 16. "Board" means the Board of Directors of the Company. "Bonus Opportunity" means a Grantee's threshold, target and maximum Bonus Opportunity for a Year, provided that such Bonus Opportunity shall be either (i) to the extent that the Grantee has entered into an employment agreement with the Company, the threshold, target and maximum bonus levels, if any, specified in the employment agreement for such Year based on the Grantee's base salary in effect on the first day of such Year, or (ii) if there is no employment agreement in effect between the Company and the Grantee as of the first day of such Year or if the employment agreement does not specify such bonus levels, the percentage of such Grantee's base salary in effect on the first day of such Year (or such later date as such Person is designated as a Grantee) as determined by the Committee in its sole discretion within the first ninety (90) days of such Year (or before such later date as such Person is designated as a Grantee). "Cause" means, as determined by the Committee, the occurrence of any one of the following: (a) any act of dishonesty, willful misconduct, gross negligence, intentional or conscious abandonment or neglect of duty; (b) commission of a criminal activity, fraud or embezzlement; (c) any unauthorized disclosure or use of confidential information or trade secrets; or (d) any violation of any restrictive covenant, such as a non-compete, non-solicit or non-disclosure agreement, between an Eligible Person and any Employer; provided, however, that in the event a Grantee is a party to an employment agreement with the Company or a Subsidiary that contains a different definition of Cause, the definition of Cause contained in such employment agreement shall be controlling. "Change in Control" means, with respect to Awards other than Deferred Compensation Awards, the occurrence of any one or more of the following: (i) the acquisition by any Person of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of more than fifty percent (50%) of the outstanding voting Shares; provided, however, a Change in Control shall not be deemed to occur solely because more than fifty percent (50%) of the outstanding voting Shares is acquired by (a) a trustee or other fiduciary holding securities under one or more employee benefit plans maintained by the Company or any of its Subsidiaries, or (b) any Person which, immediately prior to such acquisition, is owned directly or indirectly by the stockholders of the Company in approximately the same proportion as their ownership of voting Shares immediately prior to such acquisition; (ii) a merger, consolidation or other reorganization involving the Company if the stockholders of the Company and their affiliates, immediately before such merger, consolidation or other reorganization, do not, as a result of such merger, consolidation, or other reorganization, own directly or indirectly, more than fifty percent (50%) of the combined voting power of the then outstanding voting Shares of the Person resulting from such merger, consolidation or other reorganization; (iii) a complete liquidation or dissolution of the Company; or (iv) the sale or other disposition of all or substantially all of the assets of the Company and its Subsidiaries determined on a consolidated basis. Notwithstanding the foregoing, unless otherwise provided in an Award Agreement, an initial public offering of the Shares of the Company (an "IPO") shall not constitute a Change in Control for the purposes of the Plan or any Award Agreement hereunder. "Change in Control" means, with respect to Deferred Compensation Awards, the occurrence of one or more of any of the following: A Change in the Ownership of the Company: A change in ownership of the Company shall occur on the date that any one Person, or more than one Person acting as a "Group" (as defined below), acquires ownership of stock of the Company that, together with stock held by such Person or Group, constitutes more than 50% of the total Fair Market Value or total voting power of the stock of the Company; provided, however, that, if any one Person, or more than one Person acting as a Group, is considered to own more than 50% of the total Fair Market Value or total voting power of the stock of the Company, the acquisition of additional stock by the same Person or Persons is not considered to cause a change in the ownership of the Company. A Change in the Effective Control of the Company: A change in the effective control of the Company occurs on the date that any one Person, or more than one Person acting as a Group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such Person or Persons) ownership of stock of the Company, possessing 50% or more of the total voting power of the stock of the Company; provided, however, that if any one Person, or more than one Person acting as a Group, is considered to effectively control the Company, the acquisition of additional control of the Company by the same Person or Persons is not considered a change in the effective control of the Company.
